Was Your Long-Term Disability Claim Denied? Know Your Options

The Internal Appeal Trap: Why Appealing Can Cost You the Claim

When an LTD insurer denies a claim, the denial letter almost always invites an 'internal appeal'. What the letter does not say is that the appeal is reviewed by the same insurance company — often the same department — that issued the denial, with no independent decision-maker. In Canada, internal appeals also do not pause the limitation period: in Ontario and most provinces, a claimant generally has 2 years from the denial (or from when benefits stopped) to start a lawsuit, and claimants routinely burn 12 or 18 of those 24 months on successive appeals that were never going to succeed.

The United States is structurally different for employer group plans: under ERISA, a claimant usually must complete the plan's administrative appeal (typically within 180 days of denial) before suing in federal court, and the court's review is often limited to the appeal record. That makes the ERISA appeal itself the trial record — every medical report and vocational opinion must go in at that stage. Either way, the decision between appealing and suing is a legal strategy call with permanent consequences, which is why speaking to a disability lawyer before responding to a denial is the single highest-value step a denied claimant can take.

The 2-Year Change of Definition: Why Insurers Cut Claims Off

Most group LTD policies in both Canada and the US pay benefits for the first 24 months if you are unable to perform the essential duties of your own occupation. At the 2-year mark, the test changes: you must be unable to perform any occupation for which you are reasonably suited by education, training, and experience. This 'change of definition' is the point at which insurers terminate more claims than at any other stage — the cut-off letter typically arrives shortly before or at month 24, asserting that you could do some other, often hypothetical, job.

Courts have repeatedly held that 'any occupation' does not mean any job whatsoever: the alternative work must be commensurate with the claimant's status, earnings history (often interpreted as roughly 60–70% of pre-disability income), and actual functional capacity. Claimants who survive the change of definition usually do it with vocational evidence, functional capacity evaluations, and specialist reports that connect their restrictions to real labour-market requirements — not just a diagnosis.

Evidence That Reverses Denials — and Deadlines That End Claims

The most common denial reason — 'insufficient objective medical evidence' — is also the most fixable. The evidence that reverses LTD denials is specific: a treating specialist's report that addresses the policy's exact disability definition, documented functional restrictions (sitting, standing, lifting, concentration, reliability of attendance), a functional capacity evaluation, and consistent clinical notes showing ongoing treatment. For mental health and chronic pain claims — which insurers scrutinize hardest — consistent treatment with a psychiatrist, psychologist, or pain specialist matters more than any single report. Surveillance and insurer medical examinations (IMEs) are standard tactics, and both can be challenged: IME doctors are chosen and paid by insurers, and brief surveillance of a 'good day' rarely defeats a well-documented chronic condition.

Deadlines are absolute. In Canada, the limitation period to sue an LTD insurer is generally 2 years from the clear denial or termination of benefits (Ontario's Limitations Act, 2002 and equivalent statutes elsewhere). In the US, ERISA plans commonly contain contractual limitation clauses of 1–3 years that courts enforce. Because LTD lawyers across Canada and the US widely handle these cases on contingency — typically taking a percentage of recovery, with nothing owed if the case loses — cost is rarely a reason to let a deadline pass without at least a free consultation.

Related: Personal Injury Wizards · All Personal Injury Wizards · Injury Claim Deadline Checker · Should I Accept the Insurance Settlement Offer? · Preparing to Hire a Personal Injury Lawyer · All Legal Wizards